From gateway country to the region : a review of South African, developed country and Kenyan multinational enterprises expansion into East Africa

Abstract:

The evolving business landscape has witnessed an ever-increasing participation of multinational corporations from emerging markets (BRICS) and more recently multinationals from lesser-developed countries. Given their diverse backgrounds, the experiences and learnings these firms go through when they start playing in the same ?field', needs greater understanding (Hitt, Li, & Xu, 2015)
An inductive study was used to gain insights into the experiences of various MNEs that had regionalised into East Africa using Kenya as a gateway. A hypothetical process flow based on subsidiary evolution and current literature was developed to aid in the exploratory qualitative research through the use semi-structured in-depth interviews aimed at isolating the experiences and processes of the regionalisation process.
The findings resulted in an enhanced regionalisation model with overlapping relationships of five phases with a greater emphasis on growth and graduation of the firm through the various phases. In addition, the model also showed the progression or increase in knowledge and capabilities as a result of increased learning and experience and depicted a commensurate increase in managerial resource requirement and ability to manage and coordinate the overall firm.
The study contributed to existing literature by identifying experiences and processes that firms go through as they regionalise in addition to providing insights into what factors encouraged the development of Regional focused firm-specific advantages. By doing so, it expounded on the regionalisation aspect, which was influenced by a factor or a combination of factors identified in the research, which integrated both the region and country in one study.
The research emphasises the need for regional coordination mechanisms that align both the expansion and parent strategy by identifying elements crucial this occurrence and advocate for more comprehensive qualitative research on relationships,networks and outsidership.